Joseph Schumpeter's View of Innovation and the Diffusion Process Can

question 23

Multiple Choice

Joseph Schumpeter's view of innovation and the diffusion process can be represented as

• A) a continuous movement along the average product of capital curve.
• B) a series of outward shifts of the marginal product curves of capital and labor.
• C) a steady increase in the stock of human capital.
• D) an increase over time in entrepreneurial ambitions.
• E) the independent effects of workers and technology on production.

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Definitions:

Interest Rate

An interest rate is the cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal amount annually.

Loanable Funds Market

The market where savers supply funds for loans to borrowers. It's a conceptual framework for understanding the determination of the interest rate.

Equilibrium Interest Rate

The interest rate at which the demand for funds equals the supply of funds, balancing savings and investments in an economy.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied.